corporation

or authorization and adopting such by-laws or rules or regulations governing its operations) prior to entering into an agreement pursuant to § 122.106 of this subpart.

(2) A description of the health care needs and resources within the health service area.

(3) A detailed description of the functions which the applicant proposes to carry out during the period of the Conditional Designation Agreement, the manner in which it proposes to carry out such functions, and a time-phased plan for the orderly assumption of all the responsibilities and functions of a health systems agency as set forth in section 1513 of the Act (hereinafter referred to as the "work program").

(4) In the case of an applicant which has decided to establish subarea advisory councils, a detailed description of the need for and proposed use of such subarea advisory councils.

(5) A detailed description of the current and projected staff to be employed by the applicant during the period of the conditional designation agreement, including their qualifications (including proposed qualifications where positions are not filled), authority, functions, numbers, assignments, and the manner in which they will be organized to carry out the agency's work program.

(6) A detailed description of the services and the approximate cost of the services the applicant expects to be provided by contractors and consultants.

(7) A detailed description of the facilities, equipment, financial, and other resources available to the applicant.

(8) A detailed description of the manner in which the residents of the health service area have been involved in the formation of the applicant entity and the submission of the application under this subpart including evidence that the applicant has provided at a minimum an opportunity for members of the public to express their views on the qualifications, proposed governing body composition, and proposed work program of the applicant both in writing and at a public meeting sponsored by the applicant

entity. Notice of the time, place, and purpose of such meeting shall be given to members of the public through publication of a notice in at least two newspapers of general circulation throughout the health service area at least two weeks prior to such meeting and at least 30 days prior to the date of submission of the application to the Secretary; Provided, That effective with respect to entities submitting applications after September 30, 1976, such meeting must be held at least 30 days prior to the date of the submission of the application to the Secretary. Such notice shall also provide that a statement of the qualifications and proposed governing body composition of the applicant and a copy of the proposed work program will be available for public inspection and copying at a specified address, and shall invite written comments thereon by members of the public. A summary of the comments made by the public meetings and copies of any written comments of members of the public shall be appended to the application.

(9) In the case of a nonprofit private applicant, a detailed description of the manner in which local public officials, including representatives of units of general local government or groups of such units, have been involved in the formation of the applicant entity and the submission of the application. Copies of any written comments of such officials shall be appended to the application.

(10) A list of the proposed members of the applicant's governing body and executive committee, if any, including their names, occupations, affiliations, the basis for their membership on the governing body in light of the requirements of section 1512(b)(3)(C) of the Act and § 122.109 of this subpart, and the method utilized in selecting such members.

(11) In the case of an applicant entity which is a public regional planning body or single unit of general local government, a detailed description of the manner in which its governing body will operate, consistent with 122.109 of this subpart, in carrying out the responsibilities and functions of a health systems agency as set

90-149 0-82--14

forth in section 1513 of the Act and this subpart.

(12) Assurances satisfactory to the Secretary that upon completion of the period of conditional designation the applicant will meet all the requirements of section 1512(b) of the Act and be qualified to perform all of the functions prescribed by section 1513 of the Act.

(b) In the case of an application for full designation pursuant to section 1515(c) of the Act and this subpart:

(1) A copy of the Articles of Incorporation and by-laws (or, in the case of a public regional planning body or single unit of general local government, its charter, authorizing statute, ordinance, or executive order, and any internal rules or regulations which govern its operations) of the applicant, which must provide:

(i) That the applicant has the authority to carry out all the responsibilities and functions of a health systems agency as provided in section 1513 of the Act and this subpart;

(ii) That in the case of a private entity, it is nonprofit;

(iii) The manner in which governing body members will be selected and replaced, including provisions for:

(A) Removal of governing body members for good cause only;

(B) Replacement of members in the event of resignation, death, or removal;

(C) Length of terms of members, which may not exceed three years.

(iv) The manner in which the governing body will carry out its responsibilities, including provisions for voting and quorums;

(v) The manner in which the executive committee and subcommittees or advisory groups, if any, will be selected consistent with section 1512(b)(3) of the Act, their responsibilities, and the manner in which they will carry out those responsibilities;

(vi) The manner in which subarea advisory councils, if any, will be established, their members nominated, a description of their functions, and the manner in which they will carry out those functions;

(vii) The manner in which health systems agency representatives to the

Statewide Health Coordinating Council will be nominated;

(viii) The manner in which the public will be given adequate notice of business meetings of the agency, which at a minimum must provide for periodic publication in two newspapers of general circulation throughout the health service area of a schedule of the regular meetings of the agency and the address where specific agenda information may be obtained in advance of such meetings; and

(ix) Requirements relating to conflicts of interest which shall be designed to preclude the use of membership on the governing body, the executive committee, if any, or any other subcommittee or advisory group (including subarea advisory councils) for purposes which are, or give the appearance of being, motivated by private gain on the part of any individual.

(2) A detailed description of the manner in which the applicant has met its responsibilities during any prior period of designation under section 1515(b)(1) or 1515(c)(1) of the Act.

(3) A detailed description of the current and projected staff to be employed by the applicant during the period of the designation agreement, including their qualifications (including, proposed qualifications where positions are not filled), authority, functions, numbers, assignments, and the manner in which they will be organized to carry out the functions of the agency.

(4) A detailed description of the services and the approximate costs of the services the applicant expects to be provided by contractors and consultants.

(5) A list of the members of the applicant's governing body and executive committee, if any, including their names, occupations, affiliations, the basis for their membership on the governing body in light of the requirements of section 1512(b)(3)(C) of the Act and § 122.109 of this subpart, and the method utilized in selecting such members.

(6) A detailed description of the facilities, equipment, financial, and

(7) A detailed description of the manner in which the community has been involved in the submission of the application under this subpart, including evidence that the applicant has provided at a minimum an opportunity for members of the public to express their views on the qualifications, proposed governing body composition, and proposed application of the applicant both in writing and at a public meeting sponsored by the applicant entity. Notice of the time, place and purpose of such meeting shall be given to members of the public through publication of a notice in at least two newspapers of general circulation throughout the health service area at least two weeks prior to such meeting. Such meeting must be held at least 30 days prior to the submission of the application to the Secretary. Such notice shall also provide that a statement of the qualifications and proposed governing body composition of the applicant and a copy of the proposed application will be available for public inspection and copying at a specified address, and shall invite written comments thereon by members of the public. A summary of the comments made at the public meeting and copies of any written comments shall be appended to the application.

(8) In the case of private nonprofit applicant entities, a detailed description of the manner in which local public officials, including representatives of units of general local government or groups of such units, have been involved in the submission of the application. Copies of any written comments of such officials shall be appended to the application.

(9) A projected work program setting forth the manner in which the applicant proposes to carry out the responsibilities and functions of a health systems agency as set forth in section 1513 of the Act and this subpart.

(10) In the case of an applicant entity which is a public regional planning body or single unit of general local government, a detailed description of the manner in which its governing body will operate, consistent with § 122.109 of this subpart, in car

tions of a health systems agency as set forth in section 1513 of the Act and this subpart.

(11) Assurances satisfactory to the Secretary that the applicant meets and will continue to meet the requirements of section 1512(b) of the Act and is qualified to perform or is performing the functions prescribed by section 1513 of the Act and this subpart.

[41 FR 12824, Mar. 26, 1976, as amended at 47 FR 28652, July 1, 1982]

§ 122.105 Selection of agencies.

(a) Conditionally designated agencies. (1) The Secretary, after consultation with and consideration of the recommendations of the appropriate

Governor in accordance with paragraph (a)(2) of this section, may enter into a Conditional Designation Agreement with an entity whose designation will, in his judgment, best promote the purpose of section 1513 of the Act and this subpart, taking into consideration among other pertinent factors:

(i) The adequacy of the proposed work program for orderly agency development to meet the requirements for full designation after the period of conditional designation,

(ii) The reasonableness of the proposed work program in light of the financial resources to be available to the applicant,

(iii) The adequacy of the governing body selection procedures in assuring that all affected groups in the health service area had reasonable opportunity to be represented on the governing body;

(iv) The extent and type of involvement of health service area residents in development of the application for designation specifically evidence that the public meeting required by § 122.104(a)(8) of this subpart was widely publicized and that comments made were taken into consideration by the applicant;

(v) The extent of the knowledge within the applicant organization of the needs and resources within the health service area,

(vi) The adequacy of plans for developing working relationships with ap

propriate A-95 agencies, PSRO's, State Agencies and Statewide Health Coordinating Councils; with health systems agencies which are designated for health service areas within the same standard metropolitan statistical area (as determined by the Office of Management and Budget) as the health service area for which the applicant is seeking designation; and with other planning bodies, and

(vii) The extent to which the application provides for the consideration of special or unique circumstances which affect the application of criteria in paragraph (a)(1) (i) through (vi) of this section, within a State.

Provided, That in considering applications the Secretary shall give priority to an application which has been recommended for approval by each entity which has received a grant under section 314(b) of the Act to develop a plan for all or part of the health service area with respect to which the application was submitted, and by each regional medical program established in such area under Title IX of the Act.

(2) Prior to entering into a Conditional Designation Agreement with an entity with respect to a particular health service area, the Secretary will provide the Governor of each State in which such health service area is located 30 days in which to review and make recommendations concerning such applications for conditional designation. Where the Secretary does not accept such recommendations, he will provide the Governor with a detailed statement of the reasons for the decision. Further, the Secretary will consult with such other State and local officials as he may deem appropriate, and with the SHCC, if any, designated for each State in which the agency's health service area is located, with respect to such designation.

(b) Fully designated agencies. (1) The Secretary, after consultation with and consideration of the recommendation of the appropriate Governor in accordance with paragraph (b)(2) of this section, and after conducting a review of the agency's performance during the period of conditional designation, may enter into a Full Designation Agreement with an entity whose performance during such period of

conditional designation (which may not be less than one year) and whose application for full designation demonstrate to the satisfaction of the Secretary that it is capable of fulfilling, in a satisfactory manner, the requirements and functions of a health systems agency as provided in sections 1512 and 1513 of the Act and this subpart; Provided, That the Secretary will not enter into a Full Designation Agreement with an entity unless such entity has established a health systems plan and annual implementation plan in accordance with section 1513(b) (2) and (3) of the Act and has adopted procedures and criteria required to be utilized pursuant to section 1532 of the Act. In considering applications the Secretary will give priority to an application which has been recommended for designation by each entity which has received a grant under section 314(b) of the Act to develop a plan for all or part of the health service area with respect to which the application was submitted, and by each regional medical program established in such area under Title IX of the Act.

(2) Prior to entering into a Full Designation Agreement with an entity with respect to a particular health service area, the Secretary will provide the Governor of each State in which such health service area is located 30 days in which to review and make recommendations to the Secretary concerning such application for full designation. Where the Secretary does not accept such recommendations he will provide the Governor with a detailed statement of the reasons for the decision. Further, the Secretary will consult with such other State and local officials as he may deem appropriate and with the SHCC, if any, designated for each State in which the agency's health service area is located, with respect to such designation.

[41 FR 12824, Mar. 26, 1976, as amended at 41 FR 31208, July 27, 1976]

§ 122.106 Conditional designation agreements.

In accordance with § 122.105(a) of this subpart, the Secretary may enter into an agreement (hereinafter re

ferred to as the Conditional Designation Agreement) with an entity under which the entity will be designated as a health systems agency on a conditional basis with a view toward determining the entity's ability at the end of the period of its conditional designation to meet the requirements and perform the functions of a fully designated health systems agency under the Act and this subpart. Such agreement shall provide that:

(a) The entity is designated as the conditionally designated health systems agency for a health service area for a term not to exceed 12 months, beginning on a date specified in the agreement.

(b) During the period of conditional designation, the Secretary shall require the agency to meet only such requirements of section 1512(b) of the Act and perform only such of the functions prescribed by section 1513 of the Act and this subpart as he determines such agency to be capable of meeting and performing, and the agency shall perform only those functions under the agreement which the Secretary, in writing, directs it to perform; Provided, That the agency must perform at least the functions described in § 122.107(c) (1), (2), (3), (4), (5), (10), (11), (12) and (13) of this part. Where an agency has been unable to enter into any agreement described in § 122.107(c) (10), (11) and (12) within six months from the effective date of the Conditional Designation Agreement, it shall submit at such time a statement indicating the efforts that have been made to secure such agreement, the reason why such agreement has not been entered into and the future actions that the agency proposes to take in order to secure such agreement. Each such agreement shall be designed to take into account the progressive assumption of additional functions by the agency.

(c) During the period of conditional designation the number and types of requirements and functions may, in accordance with paragraph (b) of this section, be progressively increased as the agency, in the judgment of the Secretary, becomes capable of added responsibility: Provided, That (1) an agency may not perform the functions

described in § 122.107(c) (15) or (17) (except for the review and approval or disapproval of applications for assistance under section 1625 of the Act in accordance with the Appendix to Subpart A of 42 CFR Part 124) during the first year of conditional designation, and may not in any event perform the functions described in § 122.107(c) (15) and (17) (except for the review and approval or disapproval of applications for assistance under section 1625 of the Act) until such agency has established a health systems plan in accordance with section 1513(b) (2) and (3) of the Act and the Secretary has in writing authorized the agency to perform such functions; and (2) an agency may not perform the function described in § 122.107(c)(9) during any period of conditional designation.

(d) The agency shall, during the entire period of the Conditional Designation Agreement, maintain a governing body which meets the requirements of section 1512(b)(3) of the Act and § 122.109 of this subpart.

(e) The agency shall promptly notify the Secretary and the State Agency for each State in which the agency's health service area is located of changes in its legal status, organization, or executive director which occur during the period of the Conditional Designation Agreement.

(f) The agency shall agree to meet the requirements of the Act, this subpart, and any additional conditions set forth in the Conditional Designation Agreements.

[41 FR 12824, Mar. 26, 1976, as amended at 41 FR 31209, July 27, 1976; 42 FR 62270, Dec. 9, 1977]

§ 122.107 Full designation agreements.

In accordance with § 122.105(b) of this subpart, the Secretary may enter into an agreement (hereinafter referred to as the Full Designation Agreement) with an entity under which the entity agrees to perform all the functions of a health systems agency under the Act and this subpart. Such Full Designation Agreement shall provide that:

(a) The entity is designated by the Secretary as a health systems agency for a health service area for a term